MBTA Facing A Financial Crisis In The Wake Of The Coronavirus Pandemic

BOSTON (State House News Service) — Fare hikes, layoffs and other budget-balancing strategies are all in play at the MBTA starting next fiscal year as the agency embarks on an effort to close an impending budget gap of at least $308 million stemming from the COVID-19 pandemic.

T officials will also seek board approval Monday to launch an unusual two-year budgeting process, linking the agency's ongoing fiscal year 2021 spending plan to fiscal year 2022 preparations.

Depending on how much ridership returns, MBTA budgeters project the agency will face a deficit between $308 million and $577 million in fiscal year 2022 and potentially subsequent deficits through at least fiscal year 2025, officials said Monday.

The new course for budgeting at the T contrasts sharply with expectations at the start of 2020, when Beacon Hill lawmakers seemed set on passing tax hikes and new revenues to facilitate major increases in public transit spending to address reliability and safety issues and improve service.

The House in March approved a revenue package to help boost the MBTA, but the plan died in the Senate without a vote.

Over the next two fiscal years, T officials will suggest a target of $400 million in savings across the agency they hope to achieve by cutting spending, finding new revenues, and reallocating federal funding.

Any changes to service, including fare increases or job cuts, would not start until fiscal year 2022, Transportation Secretary Stephanie Pollack said during a Monday conference call. Decisions on whether to take those steps are likely months away while the T continues to survey how ridership trends move after hitting record low levels during the public health emergency.

"This is the beginning of a dialogue," MBTA General Manager Steve Poftak told reporters before presenting thebudget outlookto the Fiscal and Management Control Board. "We are mindful of the riders who depend on the MBTA and we continue to provide them service, but this is the beginning of a conversation and I think it's premature to take anything off the table."

Rider fares usually compose about a third of the MBTA's total revenue, but that source of income is cratering. T ridership dropped more than 90 percent on subways and about 80 percent on buses at the lowest points, and through mid-August, it had only recovered to a fraction of pre-outbreak levels.

The FMCB in May approved a $2.29 billion fiscal 2021 budget that increased spending over last year by about 7 percent, using -- and likely exhausting -- the $827 million the agency received in CARES Act federal stimulus funding to close budget gaps.

The control board is meeting Monday for the first time since June 22.

By Chris Lisinski, State House News Service

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(Photo: Getty Images)


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